Despite the recession, too much compromise can be bad for business

sticking to your guns in tough times is tremendously difficult, but the alternative may be worse.

Congratulations. We’ve made it to December. And we renew hopes that next year will indeed mark the turning point in this interminable recession. Technically speaking, the recession ended some time ago, but very few businesses felt that imperceptible transition. Instead, some firms didn’t make it and others are still struggling on the brink of failure. But there are a fortunate few who see a pick up in work. They’re almost afraid to use the B word: busy.
We recently asked our LinkedIn group of nearly 3,000 architects and designers to let us know how they’re doing. Judging from the responses, it’s a very mixed bag of experiences. There are a handful of firms that are working on entirely new custom homes, but most practitioners are still making do with small remodels and odds and ends jobs. Everyone is bemoaning the downward pressure on fees, and the blame falls equally on hard-nosed clients and hungry competitors.

It’s not quite the Civil War. It’s not brother against brother. But yes, times are still very hard. Paraphrasing from an even earlier war, these are the times that try men’s—and women’s—souls. Everyone is asking the toughest questions. What would I do to stay in business? What non-negotiable would I concede this time—thinking next time, when things are better, I won’t give in so much. I won’t lower my fees to this extent again. I won’t throw in as many free hours of design thinking again, just to get a good project done. I won’t design something the client wants that I know is ridiculous. But once you set the bar lower, how hard is it to raise it again?

Fees are the great verboten topic of architectural practice. We’re not allowed to address them, no matter how well our brethren in the real estate business tow the line on an industry standard. (They, too, are starting to pay a penalty over their control of the MLS.) So we talk about fee structures, or have a hair-down, late-night conversation at a bar that roams closer to the mark. The result of all of this legal obfuscation is complete confusion in the minds of the potential client. This has always been so, even before the economy fell apart.

And this confusion about what services should cost fuels the horrendous haggling of an open-air bazaar. Clients with a job have the power—and they know it. They expect to see the deal of a lifetime even from top-line firms. They feel taken advantage of if they pay full price with such leverage at their disposal. Small wonder. Our cyber, Amazon-trained cerebrums live in mortal fear of missing the “Gold Box” special.

But I recently heard an encouraging story from a well-respected architect. He had a potential client—a high-flying Wall Street guy looking to build a second home—try to browbeat him on fees. The architect took a breath and replied that he has employees to feed, and that sticking to his guns on price meant he had been able to keep everyone employed through the recession. The client asked the architect to reconsider; they went their separate ways. The architect headed home and pored over ways to lower the bill.

It turns out that was unnecessary. The client called the next day and gave him the job, saying, “You’re right. And I appreciate your devotion to your employees.” The client had laid off hundreds in his job and it had troubled him deeply. He saw authenticity and integrity in the architect and knew that’s who he wanted to build his house.